Archive for July, 2007


Rising Costs of E-Discovery Requirements Impacting Litigants

Monday, July 30th, 2007

The first electronic database I supervised in litigation ended up costing a dollar a page. And that was before a single lawyer had looked at any of it.

Making TIFF images, using Optical Character Recognition software to create searchable text, entering basic descriptive coding for each document and exporting all this data into a usable format were handled by an outside vendor that charged separately for each step. This was actually cheap, because we started with paper documents, not dozens of hard drives and servers full of e-mail, Word files, PowerPoint presentations and Excel spreadsheets that first had to be forensically imaged and treated like evidence at a homicide scene on “CSI: Miami.”

Luckily, my client was a major corporation facing claims that its opponents contended were worth many millions of dollars. The client could afford this cost, and the database created ultimately paid for itself by allowing us to find documents that changed the direction of the case.

But we built this database by choice, not in response to our opponent’s demand. The client wanted to preserve all the relevant documents and retrieve them quickly and decided the cost was worth it.

Since that time, the discovery landscape has evolved. Even before the amended Federal Rules of Civil Procedure required all parties to include electronically stored information — ESI for short — in their mandatory disclosures and early discovery planning, lawyers learned that the smoking gun in any case was likely to be found in their opponents’ e-mail files.

Demands for producing ESI grew, and now preserving, searching and producing ESI has become standard operating procedure in federal litigation (and in most state court litigation, too). Now, even the most routine business dispute requires either two parties who can agree to lay off each other’s e-mail (unthinkable, and verging on malpractice), or a significant budget for electronic discovery services.

With electronic discovery consultant fees starting at $275 an hour, and costs of collecting, reviewing and producing a single e-mail running between $2.70 and $4, experts in this market estimate that in 2007, litigants will spend more than $2.4 billion on electronic discovery services, with no end in sight to this growth.

IMPACT

What impact will this new burden have on the litigation playing field? Will this simply be an additional cost of doing business, like Sarbanes-Oxley compliance, that American businesses will have to absorb? Or can this monster be tamed before it consumes the litigation process, with the actual resolution of disputes being lost in the shuffle?

In some kinds of litigation, electronic discovery costs aren’t likely to prevent a fair resolution because the burdens of electronic discovery are roughly equal on both sides. When Behemoth Business Software sues Venerable Financial for patent infringement, each side likely has a similar volume of ESI to preserve, search and produce, and is likely able to pay for high-end consultants to help them fulfill their e-discovery duties. The costs are high in these cases, but they are not likely to skew the outcome of the case.

But in cases where one party either has little ESI (a former employee or consumer, for example) or both parties have similar amounts of ESI but one party has more money, the burdens are not equivalent. The costs required to produce ESI in formats that comply with the highest standards of forensic practice — even in a routine dispute — can bring a weaker opponent to its knees.

The flip side of this phenomenon, of course, is the time-honored technique of burying the small party under a blizzard of purportedly relevant documents. Depending on how broadly the producing party defines the search for relevant ESI, Goliath can now defeat David with terabytes of data.

While in the now-famous Zubulake case, the court attempted to formulate a test for shifting the costs of e-discovery to requesting parties, and the amended federal rules include a cost-shifting provision in Rule 26(b)(2), this issue has not been litigated enough times or in enough forums to provide a reliable general rule to guide the parties. So when ESI burdens appear disproportionate, the parties have the choice of swallowing those costs or paying the costs of filing motions to get relief (and then having to wait for the decision).

THREAT OF SANCTIONS

Because all litigators and in-house counsel have heard about the sanctions that are being imposed on parties who mishandle ESI, hiring an e-discovery consultant is starting to look mandatory (and running up litigation costs).

In case after case, courts are imposing sanctions for spoliation or late production of ESI. Some of these cases note that the parties’ conduct is especially blameworthy because they dared to use their own IT employees to handle their ESI instead of paying a pricey consultant. Don’t get me wrong — a skilled e-discovery consultant can be a real asset in the right kind of case. But when is the last time you read a case sanctioning a litigant for daring to make the copies on the litigant’s own machine, instead of paying a vendor to do it?

With serious sanctions on the line, many parties simply will have to pay the money, or embrace more litigation risk.

The committee that reviewed the 2006 amendments to the Federal Rules of Civil Procedure did consider such cost issues. The committee’s report mentions the question of costs more than 40 times, and a few provisions try to contain those costs. But each provision includes loopholes and provisos that the courts are only beginning to clarify. If the courts do not use these provisions to limit e-discovery and shift costs to parties that are requesting extremely burdensome e-discovery, our clients could end up paying more for civil litigation without getting better justice.

For instance, when the ESI rules were being considered, many businesses worried they would face spoliation sanctions if they failed to incur the cost of preserving all ESI in perpetuity.

The “safe harbor” for routine document destruction in Rule 37 appears to protect litigants from that threat — but only until they knew or should have known they were under a preservation obligation.

Privilege review also imposes high costs. Because ESI proliferates so quickly, the cost of reviewing it all for privilege fast enough to allow the rest of the case to proceed promptly can be prohibitive. The “clawback” provision in Rule 26 provides some assurance to both sides that inadvertent disclosure of privileged documents won’t be deemed a waiver — at least until your opponent manages to convince the court that it should be. And under the new “reasonably accessible” provision of Rule 26, parties do not have to incur the costs of reconstructing data on backup tapes — unless a court finds that there is good cause to order the discovery in spite of the cost.

All this means that there will be some new risks in litigation, at least for the next few years while the courts consider these issues. Effective lawyers should help their clients battle these costs using these rules, improved technology and a strong dose of common sense.

We have a new mandatory, expensive weapon to use against each other but no guarantee that it will help us reach the truth faster or more reliably. Even more so now than in the past, the civil litigation system needs lawyers and judges who will respect and police the boundary between appropriate discovery and extortion, and make sure the e-discovery sideshow leaves room for resolving the parties’ real dispute.

By Ann G. Fort
Fulton County Daily Report
03-20-2007

Ann G. Fort is a partner in the Intellectual Property group at Sutherland Asbill & Brennan, where she heads the firm’s Electronic Discovery and ESI Management initiative.

Article Source: http://www.law.com/jsp/law/LawArticleFriendly.jsp?id=1174307784199

Controlling the Accidental Release of Digital Information

Monday, July 9th, 2007

In an age when virtually all documents are created on computers, it has become second nature to electronically share these materials through e-mail, extranets, and USB flash drives. Unfortunately, many people don’t fully understand exactly what information is contained in the files they are distributing. In the legal community, where clients routinely entrust sensitive and privileged information to their legal counsel, this lack of understanding can have significant consequences. Imagine how you would feel if you were counsel in any of these situations:

In a products liability matter, both parties have been ordered by the court to exchange final trial exhibit lists in electronic format, such as an Excel spreadsheet. Rather than e-mail the file, your trusted paralegal copies the file onto a floppy disk that he sends via FedEx. Several days later, your opposing counsel acknowledges receipt of your exhibit list, but he also notes that the floppy disk contained an unrelated database apparently relating to another litigation matter on which you are also working. Have you just waived work product privilege on that work? (more…)

Defining A Standard for Admitting Electronic Evidence at Trial

Monday, July 9th, 2007

While many attorneys and their clients focus on the importance of preserving electronic files and data to minimize the risk of evidence spoliation, far fewer give the same attention to the seemingly straight-forward process of validating these materials for admission into evidence. One inadvertent result is that while standards for resolving electronic evidence spoliation allegations have been constantly tested and improved through a combination of articulate judicial decisions, specific procedural rules, and extensive commentary by legal scholars, far fewer written opinions have squarely addressed the standards for the admissibility of electronic evidence, leaving a much smaller pool of resources from which to draw guidance.
A recent Ninth Circuit case demonstrates the degree to which standards for the admissibility of electronic evidence admissibility remain unsettled and open to significant variation. In re Vinhnee, 2005 WL 3609376, 06 Cal. Daily Op. Serv. 146, 2006 Daily Journal D.A.R. 169 (B.A.P. 9th Cir. Dec 16, 2005), stands (among other things) for the proposition that a sponsoring party cannot rely upon judicial notice to fill gaps in the explicit foundation that it uses to authenticate electronic materials it wishes to introduce as evidence. (more…)

Finding the Line Between E-Discovery Expert and Fact Witness Testimony

Monday, July 9th, 2007

Digital information is an increasingly common part of civil and criminal litigation. Electronic mail messages and documents-or evidence that such materials are suspiciously missing-are powerfully persuasive pieces of evidence that can make or break a case. Courts recognize the importance of electronic files and their analysis, and they routinely admit such materials into evidence. However, where is the point where relaying objective facts about electronic documents crosses the line into expert opinion testimony?

The Sixth Circuit case, United States v. Ganier, 468 F.3d 920 (6th Cir. 2006), recently addressed exactly that issue. In a criminal matter, the prosecution announced its intention to present the testimony of an IRS agent regarding evidence that potentially relevant files had been located by running queries using Microsoft Windows utilities-and then deleted. (more…)

An introduction to Computer Forensics

Saturday, July 7th, 2007

Computer Forensics is the process of investigating electronic devices or computer media for the purpose of discovering and analyzing available, deleted, or “hidden” information that may serve as useful evidence in supporting both claims and defenses of a legal matter as well as it can helpful when data have been accidentally deleted or lost due to hardware failure.

This is a very old technique but now it has changed a lot because of technological advances & modern tools and software’s. which makes Computer Forensics much easier for Computer Forensic Experts  to find & restore more evidence or data, faster and with more accuracy .

Computer forensics is done Using advanced techniques and technologies, a computer forensic expert uses this techniques to discover evidence from a electronic storage device for a possible crime . The data can be from any kind of electronic device like Pen drives , discs, tapes, handhelds, PDAs, memory stick,  Emails, logs, hidden or deleted files  etc….

Most of us think that a deleting a file or history will remove it completely from the hard disk drive. But in realty it only removes the file from the location, but the actual file will still remain on your computer. It is easier to track what has been done on your computer but difficult to say by whom . Although it’s possible to alter or delete the data completely from your storage device . it depends on ones computer forensic experts skills how well he can find and restore the data without any loss or change.

Computer forensics can be used to uncover a fraud , Unauthorized use of a computer, violation company policies, inadequate record keeping etc… by tracking track emails, chat-history, files, tapes, sites people browse or any other form of electronic communications.

Data security is one of the biggest issues the corporate world is facing now, by publishing company’s internet / policies & consequences for violations, signing of compliance documents by employees businesses can initiate monitoring their own computer systems. Making employees aware that forensic software and personnel are available could prevent workers from wrongdoing.

Computer forensic is an growing niche in the law enforcement field. Unlike many jobs in information technology sector chances are that computer forensics services will not be outsourced to other country, because of the confidentiality of the data business will not allow it to travel just to save a little cash.